As a cost-effective, environmental-friendly and time-saving vehicle for work, a company car can be a great benefit for a business and its employees. But just how much is a company car? It will depend on a few factors, meaning that the cost per month can vary wildly. Let’s take a look at the elements which affect the cost, so that you can get the most out of your company car.
First and foremost, the cost of a company car is highly dependant on the type of car chosen. If you are looking for a top of the range, luxury car, then you will likely pay much more than if you were to choose an entry-level vehicle. For example, if you were to opt for a Mercedes-Benz S-Class, then this would likely set you back by as much as £450 per month. Conversely, if you selected a Ford Fiesta for your company car, then this might cost you as little as £150 a month.
Another factor is the mileage on a company car, which has a direct bearing on the cost of the car. Cars which are used for work purposes tend to rack up higher mileages than those for personal ownership, so it is important to factor in this when considering costs. The more miles a company car does, the more expensive it can be. This is because higher mileage cars need to be priced higher to account for the added wear and tear.
The length of the contract can also play a major role in the cost of a company car. If you go for a yearly contract, then it is likely to be much more expensive than a monthly contract. This is mainly due to the fact that a yearly contract usually involves a deposit, as well as higher monthly fees. This means that if you are looking for a budget-friendly option, then a monthly contract may be the way to go.
Insurance can also be a major cost when it comes to company cars. As with any car, insurance is a necessity when you are on the road, and the same applies to company cars. However, because of the higher mileages that are associated with these vehicles, the cost of insurance is likely to be higher than for personal ownership cars. It is therefore important to factor in insurance costs in addition to the purchase price when considering the cost of a company car.
Finally, it is important to bear in mind that the cost of a company car is not just the purchase price and the insurance. There are also added costs associated with running a company car, such as fuel, servicing and maintenance costs. Furthermore, there are also tax implications to consider, as company cars are subject to the same tax rules as other vehicles. All these extra costs should be taken into account when calculating the cost of a company car.
Additional Considerations
Overall, the cost of a company car will ultimately depend on a range of variables such as the type of car chosen, the contract length and the mileage. It is therefore important to carefully consider all of these factors when making the decision to purchase a company car.
Factors That Influence Company Car Cost
The cost of a company car will depend on several things, from the car model you choose to the contract length and the mileage of the car. For example, if you select a higher end car model such as a Mercedes-Benz S-Class, then this will significantly increase the cost of your monthly payments. Additionally, if you have a higher mileage company car, then this may also increase the cost of owning and running it. Furthermore, if you opt for a yearly contract for your company car, then this too can raise the cost.
The Benefits of Company Cars
Despite all the extra costs associated with a company car, there are some major benefits that can be derived from having one. One benefit is the fact that they are cost-effective, as they do not require you to pay out large sums of money upfront. Additionally, they are also more environmentally friendly than personal cars, thanks to their emissions regulations. Finally, they are also a great time-saver, as they can take you directly to your destination without needing to be parked and locked away.
Conclusion and Cost Prediction
In conclusion, the cost of a company car is highly dependent on a range of variables, from the car model to the contract length and the mileage. Taking all these factors into account, it is reasonable to assume that a typical company car will cost around £300 to £400 a month, although this will vary according to the model and the contract length.
Analyzing Pros and Cons
Like everything, a company car comes with pros and cons. On the one hand, they offer a cost-effective and environmentally friendly way of travelling to work, as well as being a great time-saver. On the other hand, the cost of a company car can be quite high when compared to a personal car, with additional costs for things such as insurance, fuel and servicing.
Funding Company Cars
When it comes to funding a company car, your business may have a range of options available. It could be that the business or individual employees are able to purchase the car outright, or alternatively, the business may be able to lease the car for a longer period of time. Furthermore, a business could opt for a hire purchase scheme, which entails taking out a loan to purchase the car and then paying off the loan over an agreed period of time.
Tax Implications of Company Cars
Finally, it is important to consider the tax implications of a company car. As company cars are subject to the same rules as other cars, they will be taxed accordingly. The amount of tax which is payable will depend on the make and model of the car, as well as how often it is used and how many miles it does each year. Therefore, it is important to consider the tax implications of any company car before making a final decision.
